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Full text of "ANNUAL REPORT - ONTARIO ENERGY BOARD 1960"

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FIRST 


ANNUAL REPORT 


OF 


THE ONTARIO ENERGY BOARD 


Year Ended December 31, 1960 



I M 



t- 




phone em. 3-1211 ONTARIO ENERGY BOARD 79 ° BAY street 

LOCAL 2-2851-2-3 TORONTO 2 



March d, I96I. 



Re: First Annual Report 



Dear Sir: 

I have the honour to send you herewith the 
First Annual Report of The Ontario Energy Board to 
December 31, i960. 

Your obedient servant , 



A.R. Crozier, 
Chairman. 



The Honourable Robert W. Macaulay, Q.C, 
Minister of Energy Resources, 
Parliament Buildings, 
Toronto, Ontario. 



FIRST ANNUAL REPORT 



OF 



THE ONTARIO ENERGY BOARD 



Year Ending 
December 31, i960 



TABLE OF CONTENTS 

Page 

Introduction 1 

Summary of Energy Board Functions and Powers . 3 

Personnel 5 

Applications Heard and Orders Issued 6 

Revenue , 9 



BI- 



ANNUAL REPORT 



ONTARIO ENERGY BOARD, i960 



INTRODUCTION 

The Ontario Energy Board* s predecessor, The Ontario Fuel 
Board, was established by the enactment of The Ontario Fuel Board 
Act, 1954, which was proclaimed in force by the Lieutenant 
Governor on May 13, 1954. It consisted, in the first place, of 
three members but, later in 1954, two more members were added, 
making five in all. The Ontario Fuel Board Act, 1954, was 
amended in 1955, 1956, 1957 and 195& but (except for Section 6, 
195&) the Act and Amendments were repealed and The Energy Act, 
i960, and The Ontario Energy Board Act, i960, were substituted 
therefor, being proclaimed in force on September 1, i960. 

The functions of the Ontario Fuel Board were partly 
judicial and partly administrative in nature but, after September 
1, i960, the administrative work, as described in The Energy Act, 
i960, was transferred to the Department of Energy Resources. At 
the same time, the Ontario Energy Board took over the judicial 
part of the work, as prescribed by The Ontario Energy Board Act, 
i960. The remainder of this report, therefore, will complement 
the series of Annual Reports relating to the activities of the 



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Ontario Fuel Board up to the time of its demise on August 31, 
i960, and will describe the work of the Ontario Energy Board 
from its inception on September 1, until December 31, i960. 

The composition, responsibilities and powers of the 
Board are defined in The Ontario Energy Board Act, i960, and in 
several sections of The Energy Act, i960. It is there enacted 
that public hearings shall be held by the Board before any Order 
is made relating to matters over which it has jurisdiction and 
that written reasons shall be given for its decisions. The 
Board may make Orders approving or fixing just rates and other 
charges relating to the sale of gas, but it may also issue 
interim Orders valid for not more than one year, decreasing the 
rates charged for gas, without a hearing, when requested to do 
so by the company concerned. Also, in addition to the powers 
enumerated below, regarding the injection and storage of gas, 
the Board may fix the rates which the person authorized may 
charge for the storage of gas. 

Provision is also made for appeals to the Lieutenant 
Governor in Council and to the Court of Appeal. 

Part II of The Energy Board Act relates to the functions 
of the Energy Returns Officer, who is appointed by the Lieutenant 
Governor in Council to assist the Board, primarily in financial 
matters related to gas rates. This part of the Act also provides 
the E.R.O. with authority to require returns and statements from 



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gas companies and also provides that this information remain 
confidential. 

It is also prescribed that the Board shall make a report, 
annually, tc the Minister, containing such information as the 
Minister requires. 

Part II of The Energy Act provides that the construction 
of pipe lines for oil or gas must not be undertaken unless, and 
until, a public hearing has been held and an Order has been 
obtained from the Board giving the applicant the right to con- 
struct. At all public hearings, any persons interested have the 
right to be heard. 

In the event a pipe line company having leave to con- 
struct a line is unable to reach agreement with the land-owners 
concerned, a further hearing must be held by the Board, after 
which the applicant may be authorized to expropriate land pro- 
vided it is in the public interest. Provision is also made for a 
Board of Arbitration to make awards relating to matters of com- 
pensation, in cases where the amounts of such compensation for 
expropriation or damage are in dispute. 

SUMMARY OF ENERGY BOARD FUNCTIONS AND POWERS 
The Energy Board Act, i960 . 

1. To make Orders approving or fixing just and reasonable 
rates for the sale of gas by persons engaged in: 



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(i) gas distribution; 
(ii) gas transmission; 
(iii) gas storage. 

2. To make Orders authorizing persons to inject gas into, 
store gas in and remove gas from designated gas storage 
areas . 

3. To make Orders for the payment of money out of the 
Abandoned Works Fund . 

4. To make Orders granting leave to discontinue the supply of 
gas to any work or appliance. 

5. To adjudicate, examine and report on the following matters 
referred to the Board by the Lieutenant Governor that 
require a public hearing: 



(a 
(b 
(c 
(d 
(e 
(f 



Location and spacing of wells; 

Designation of drainage units; 

Joining of interests in a field or pool; 

Exempting persons from compliance with the Act: 

Exempting appliances from compliance with the Act; 

Any question respecting energy that requires a 

public hearing. 



The Energy Act, i960 . 

1. To make Orders respecting the revocation, suspension or 
reinstatement ^f licences, permits or registration. 



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2. (a) Tc make Orders granting leave to construct pipe 
lines for the transmission of oil or gas. 

(b) To make Orders authorizing expropriation of land for 
the purposes of an oil or gas pipe line. 

The Municipal Franchises Act 

1. To make Orders granting the approval of terms and 
conditions nf franchise by-laws for the distribution 
of gas in municipalities. 

2. To make Orders granting Certificates of Public 
Convenience and Necessity for the distribution of 
gas in municipalities. 

The Assessment Act 

1. To designate the length and diameter of gas and oil 
transmission lines for assessment purposes. 

PERSONNEL 

The following persons constituted the personnel of the 
Board during the period September 1st, i960, to December 31st, 
I960: 

A.R. Crozier, Chairman 

J.J. Wingfelder, Commissioner and Secretary 

D.M. Treadgold, Commissioner 

L.R. MacTavish, Commissioner 
E.A. Allcut , Commissioner 



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Ivy C. Fidler, Secretary to the Chairman and Acting 
Assistant Secretary to the Board 

H.G. Clark, Board Engineer 

W.P. Armes, Energy Returns Officer 

APPLICATIONS HEARD AND ORDERS ISSUED 



*FUEL *ENERGY 
BOARD BOARD 

Approval of Terms and Conditions of 

Franchise Agreements 5 5 

(section 9 of The Municipal Franchises Act) 

Certificates of Public Convenience and 

Necessity 5 6 

(section 8 of The Municipal Franchises Act) 

Rate Orders (18 of these were extensions, 
i.e. interim) 

(The Ontario Fuel Board Act) 

Leave to Construct Orders 
(The Pipe Lines Act) 

Expropriation Orders ( 1 parcel involved ) 
(The Pipe Lines Act) 

Secondary Recovery Orders 

(The Ontario Fuel Board Act) 

Gas Storage Orders 

(The Ontario Fuel Board Act) 

General - 1 

(Hearings held as result of matters 
referred by Orders-in-Council) 

60 2k 

TOTAL 8k 

* Fuel Board - period January 1/60 to August 31/60 

* Energy Board - period September l/6o to December 31/60 



21 


d 


26 


2 


1 


2 


1 


- 


1 





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The Ontario Energy Board is presently engaged in its 
first major rate hearing, namely that of the Consumers' Gas 
Company, which is the largest gas utility in Canada. It serves 
92 municipalities and more than 200,000 customers. 

This hearing commenced on September 2S, i960, and has 
been adjourned three times, to give the company the necessary 
opportunities to prepare data for the Board, which was not avail- 
able at the time of the first hearing. Before December 31st, i960, 
9 exhibits had been filed by the company, comprising in all, some 
300 pages and the transcript of evidence covered 355 pages. The 
hearing will be reconvened on January 9th, I96I, and it is antic- 
ipated that the transcript may ultimately exceed 1000 pages. 

The extensive deliberations are due mainly to the fact 
that the Consumers' Gas Company was established over 110 years ago 
and was organized and operated for the production of manufactured 
gas, until the year 19 c 5. During this period, the company's rates 
were not subject to Provincial Government regulation. In 1955, 
the company commenced the distribution of natural gas and, at that 
time, the company's rates came under the control of the Provincial 
Government. These conditions have complicated the work of the 
Board because much of the background material, that would normally 
be used in situations of this kind, was not available. Conse- 
quently, much research work has been necessary on the part of the 
Board and its staff with regard to financial statements, account- 
ing procedures and statistical information. The company has 



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co-operated with the Board in these matters. As this is the 
first of a series of similar hearings, the Board and its staff 
have studied rate cases in other jurisdictions, both in Canada 
and the United States. It is anticipated that this hearing will 
be completed in the spring of 1961 and that, thereafter, other 
hearings will be commenced relating to the rates charged by- 
other gas companies. 

While some of the $k applications enumerated above, 
related to routine matters of a relatively minor nature, others 
were concerned with fundamental questions and the decisions made 
thereon may have important influences on the entire gas and oil 
industry. 

Two examples of the latter are:- 

(a) The injection and storage of natural gas in a 
previously designated storage area was authorized. 
This procedure results in the provision of a 
reservoir of gas, that will facilitate the contin- 
uity of gas supplies in the Province of Ontario 
and will help to keep gas rates lower than would 
otherwise be possible. Thus, the decision may 
have an important bearing on the economics of the 
gas industry. 

(b) The Board was also directed, by Order-in-Council, 
to adjudicate, examine and report on a water 



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flooding project in Lambton County for the 
secondary recovery of oil from an old oil field 
near Oil Springs. After interested parties had 
been heard and following much deliberation, the 
Board recommended that a regulation be passed, 
permitting this operation. The project will 
probably be undertaken early in I96I and will 
increase, substantially, the recovery of oil 
from a partially depleted oil field. This will 
have the effect of making oil available that 
would not otherwise be recoverable and, there- 
fore, will extend the life of one of the oldest 
oil fields in the Province of Ontario. 

It is noteworthy, also, that 2& applications were heard 
relating to the construction of transmission pipe lines for 
providing gas services to areas in the Province that were not 
previously served with that fuel. 

Some of these applications provided for the replacement 
of under-sized or obsolescent piping, thus providing increased 
gas supplies to certain areas and enhancing public safety. 

REVENUE 

In compliance with the requirement of section 23 of The 
Ontario Energy Board Act, I960, the Board fixes costs payable on 



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various types of Applications and Orders. There is a statutory- 
tariff of $25 for filing an Application. Hearing costs vary 
and are fixed at the discretion of the Board with due regard 
being given to the circumstances, time required for the Hearing 
and Consultants' costs, if any. 

Board revenue for the calendar year i960 is as follows: 

Ontario Fuel Board $ 5,450.00 

(Jan. 1/60 to Aug. 31/60) 

Ontario Energy Board 1,300.00 

(Sept. 1/60 to Dec. 31/60) 

$ 6,750.00 

All of which is respectfully submitted. 

DATED at Toronto this day of March, 1961. 



A.R.. Crozier, 
Chairman.